The use of balanced scorecards, developed to track and monitor selected key performance indicators for different departments, should not exclude the human resources organization. Key performance indicators for HR typically include financial results, customer satisfaction, process improvement and career development. Creating a balanced scorecard for an HR business helps leaders identify and agree upon a strategic approach. Shared goals encourage collaboration and cooperation.


Managers create a balanced scorecard to focus on manageable growth. Taking this approach helps avoid risks. By tracking labor costs, turnover rates and training budgets, HR managers measure results. They can spot trends and calculate a return on investment. Without quantifiable measures, HR initiatives may get evaluated on subjective means alone. For example, if labor costs rise, HR managers may need to evaluate other options, such as hiring in lower-cost locations, to obtain the resources needed to support the business. Using a scorecard approach, successful programs receive approval for budgets, while failing programs face closer scrutiny before receiving sponsorship.


The HR department promotes succession planning, retention and corporate social responsibility. By measuring how well these initiatives get received by the population, HR managers know what to implement in the future. For example, if the retention of employees hired directly from university programs increases, analysis may reveal more expansive HR should be provided to this population. This might include orientation programs and resources dedicated to helping university graduates transition from campus life to the corporate world.


An HR balanced scorecard might report the results of simplifying the sales training process, conducting employee surveys or motivating employees. The advantage to tracking and monitoring results over time is that the impact of HR initiatives typically takes a long time to appear. For example, employee survey results might reveal dissatisfaction with executive leadership communication. During the next year, HR can conduct more meetings and improve collaboration. Then, satisfaction should increase the following year.


Key HR programs typically include developing leadership skills, building employee competency and improving reward systems. Using a balanced scorecard approach enables HR managers to correlate their programs with the impact they have on the business. For example, when HR provides workshops, courses and resources for employees to improve their leadership skills, productivity typically improves. Teams work together better. Conflict diminishes. This enables the workforce to meet deadlines, fulfill obligations and achieve strategic goals. Validating the impact of HR initiatives helps solidify HR as a strategic partner.